Friday, October 14, 2005

Business Plan Credibility

One of Cauvin, Inc.'s current clients is a start-up. The founder of the company writes business plans for a living, so naturally he wrote the business plan for his company. A key reason for hiring us was to give credibility to the overall business plan. We conducted a market analysis and provided him with a report, which he attached to the business plan.

A business plan that doesn't base its premises on solid market research does little more than speculate about:
  • How the company should market the product
  • The size of the market for the product
  • What the product should do
If you're a CEO, one of your responsibilities may be to pitch the story about your company's products to investors. You'll have a lot more credibility, and have a more convincing story, if you have solid market research to back it up.

2 comments:

mark said...

I'm a little confused. Is this a positive example? If I just attach data/analysis to a business plan, that doesn't make it a better business plan... (?) Did he have much to revise?

Roger L. Cauvin said...

Absolutely! Key pro forma numbers came from the market segmentation and sizing estimates. Furthermore, the sections of the business plan on marketing and product definition reflected the recommendations in the final report.